Fill the tank and the State coffers

The debate is on the table as to whether fuel discounts will be extended until the end of September. We are talking about 21 cents per liter of gasoline and 29 cents per liter of diesel. This discount combines a reduction in VAT and another reduction in the hydrocarbon tax. With the current reduction, Spain is already at the lower limit of taxation allowed by the European Union. Why can the Government influence the price of fuel so much?According to the CNMC, approximately half of the price we pay corresponds to the costs and margins of the companies in the chain, while the other half consists of taxes: VAT and the hydrocarbon tax. In fact, gasoline bears a higher tax burden than diesel. The most striking thing is that VAT is calculated on the base price plus the hydrocarbon tax. In other words, we pay a tax on another tax. Therefore, any increase in price is immediately translated into more revenue for the State.As the holidays approach, the decision is more relevant than ever. An increase in fuel prices would drive up inflation in the coming months, which already stands at a worrying 3.2%. Let's not forget that energy is the raw material of all raw materials: when it becomes more expensive, it ends up making almost everything more expensive. Private car fuel consumption always rises during summer months. The price of fuel, moreover, conditions our perception of inflation. Few people consult the CPI every month, but everyone who drives knows how much it costs to fill the tank. When gasoline approached two euros per liter, it made headlines. Deep down, it's also a political climate decision. And, if not, there's always that joke that says no matter how much the price goes up, we can always put in 20 euros of gasoline.